Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Butter and Margarine in Chile

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Executive Summary

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TRENDS

In mid-2016 a new food labelling law was implemented. According to this law, products containing high levels of fat, calories, sugar or sodium must indicate this on the front label. Both butter and margarine were products affected by the legislation, bearing labels on their front face. Consumers expected to see labels in butter but not in margarine, a product that was positioned as healthier in the minds of consumers. As a consequence, margarine was no longer considered a healthy product, which negatively affected the category.

COMPETITIVE LANDSCAPE

Soprole SA, a subsidiary of Fonterra, remained the leading player and accounted for 21% of retail value sales. Soprole has been a key player for many years and strengthened customer loyalty through its high quality. Additionally, Chileans tend to be loyal to long-established companies, especially for household staples. Furthermore, the company benefited from an extensive distribution network across various channels.

PROSPECTS

With a retail value CAGR of 4% at constant 2017 prices expected over the forecast period, the category is set to underperform the review period CAGR of 6%. The category is at a stage of maturity that leaves little room for volume growth. As such, players are expected to focus on developing products with higher added value, which will help to mitigate the effect of the black label imposed by the food labelling law in 2016. Such products can be functional varieties that benefit heart health or organic varieties that offer something new in a category that last saw significant innovation some time ago.

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